Markets continue to trade weak despite some recovery

Indian markets continue to trade weak despite some intraday recovery amid tepid global cues and ahead of the April F&O series expiry. Every small attempts of recovery were being sold out and the traders were keeping light ahead of the long weekend and the F&O expiry. The benchmark BSE Sensex though have regained the 27,000-level but the CNX Nifty was still trading below 8200 mark. Traders were still concerned about capital outflows by foreign investors on MAT worries and lower-than-expected Q4 earnings posted by some blue-chip companies. It was reported that finance ministry will likely bring in clarity on application of minimum alternate tax on other income streams for foreign investors including interest on bond, private equity and foreign direct investments (FDI), in the Finance Bill, 2015 when it comes up for discussion in the Finance Bill, 2015 when it comes up for discussion. Back on street, while the broader markets were flat, some bounce back was being witnessed in the banking gauge that have restricted the markets fall. Other sectoral indices like consumer durables, oil & gas, healthcare too were showing some upmove, while Metal, IT, tech and FMCG were dragging the markets lower.

The BSE Sensex is currently trading at 27039.18, down by 186.75 points or 0.69% after trading in a range of 26924.17 and 27242.05. There were 8 stocks advancing against 20 stocks declining on the index.

The broader indices were showing mixed trend; the BSE Mid cap index was up by 0.07%, while Small cap index was down by 0.03%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.78%, Oil & Gas up by 0.70%, Bankex up by 0.35%, while Metal down by 1.15%, TECK down by 1.11%, IT down by 0.96%, FMCG down by 0.95%, INFRA down by 0.71% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.36%, Sesa Sterlite up by 1.47%, Reliance Industries up by 0.84%, Cipla up by 0.64% and Sun Pharma Inds up by 0.37%. On the flip side, Bharti Airtel down by 3.88%, HDFC down by 2.45%, Coal India down by 2.20%, Dr. Reddys Lab down by 2.14% and Hindustan Unilever down by 1.95% were the top losers.

Meanwhile, giving some relief to the cash strapped sugar sector, the government has hiked import duty on sugar to 40 percent and scrapped the excise duty on ethanol made from molasses. The government has said that these measures would significantly improve the adverse price sentiments in respect of sugar and also boost liquidity of millers, facilitating the clearing up of cane arrears. Though, India imports very small quantity of sugar but the move will help sugar mills clear dues worth Rs 21,000 crore to farmers.

The scrapping of excise duty will give the millers Rs 5 per litre extra on ethanol they produce from sugarcane. The Cabinet also decided to remove central excise duty on ethanol supplied for blending, presently being levied at 12.36 percent. Ethanol produced from molasses generated in the next sugar season (starting October 2015) and supplied for ethanol blending would be exempted from excise duty. Price benefit would be passed on the to the sugar mills/distilleries.

Apart from hike in import duty and removal of excise duty on ethanol, the government has also decided to withdraw the 'Duty Free Import Authorization' scheme (DFIA). Under this, exporters of sugar could import permissible quantities of raw sugar without any duty for subsequent processing and disposal. The withdrawal of the scheme will prevent leakage of sugar made from such duty free imports in the domestic markets.

The government has said that decision to raise the customs duty is aimed at preventing any imports in case international prices of sugar were to depress further, however Industry body ISMA said that the decision to hike import duty and remove excise duty on ethanol would help the millers only in the long run and demanded that the Centre should buy 10 percent of sugar produced this year to help clear cane arrears.

The CNX Nifty is currently trading at 8190.05, down by 49.70 points or 0.60% after trading in a range of 8147.45 and 8229.40. There were 16 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.52% and BPCL up by 3.09% and Lupin up by 2.02% and Sesa Sterlite up by 1.45% and Yes Bank up by 1.31%. On the flip side, Bharti Airtel down by 3.81%, Idea Cellular down by 2.78%, HDFC down by 2.56%, Dr. Reddys Lab down by 2.39% and Bajaj Auto down by 2.30% were the top losers.

All the Asian markets were trading in red, Nikkei 225 slumped by 538.94 points or 2.69% to 19,520.01, Hang Seng lost 204.58 points or 0.72% to 28,195.76, Taiwan Weighted was down by 33.78 points or 0.34% to 9,820.05, KOSPI Index was lower by 15.46 points or 0.72% to 2,127.17, FTSE Bursa Malaysia KLCI was down by 9.89 points or 0.54% to 1,833.04, Straits Times decreased by 8.47 points or 0.24% to 3,478.68, Jakarta Composite lost 5.74 points or 0.11% to 5,099.83 and Shanghai Composite was marginally down by 1.16 points or 0.03% to 4,475.46.